Costar Group Inc. v. Loopnet, Inc., CIV. A. DKC99-2983.
| Citation | 164 F.Supp.2d 688 |
| Decision Date | 28 September 2001 |
| Docket Number | No. CIV. A. DKC99-2983.,CIV. A. DKC99-2983. |
| Parties | COSTAR GROUP INC., and Costar Realty Information, Inc. v. LOOPNET, INC. |
| Court | U.S. District Court — District of Maryland |
Charles D. Ossola, Arnold & Porter, Washington, DC, for Plaintiffs.
R. Wayne Pierce, Law Office, Ann M. Grillo, Tydings and Rosenberg LLP, Baltimore, MD, William O. Callaghan, Wilson Sonsini Goodrich and Rosati, Palo Alto, CA, Jeffrey Allan Wothers, Tae Hyung Kim, Niles Barton and Wilmer LLP, Baltimore, MD, Kenneth B. Wilson, Perkins Coie LLP, Menlo Park, CA, for Defendant.
Presently pending and ready for resolution in this copyright infringement action are (1) Plaintiffs' motion and Defendant's cross-motion for summary judgment on the safe harbor defense under the Digital Millennium Copyright Act (paper nos. 70 and 87); (2) Plaintiffs' motion and Defendant's cross-motion for summary judgment on copyright infringement liability (paper nos. 71 and 87); (3) Defendant's motion and Plaintiffs' cross-motion for partial summary judgment on misuse and statutory damages (paper nos. 87 and 95); and (4) Plaintiffs' motions to modify the preliminary injunction (paper nos. 66, 105, and 121).1 Hearings were held separately on the preliminary injunction and the summary judgment motions.
Plaintiffs CoStar Group, Inc. and CoStar Realty Information, Inc. (collectively CoStar) filed suit against LoopNet, Inc. (LoopNet) alleging copyright infringement. CoStar is a national provider of commercial real estate information services. It maintains a copyrighted commercial real estate database which includes photographs. Some of the photographs are taken by professional photographers hired by CoStar either as employees or as independent contractors. CoStar licenses users of its database.
LoopNet is an internet based company offering a service through which a user, usually a real estate broker, may post a listing of commercial real estate available for lease. The user accesses and fills out a form at LoopNet's site, with the property name, type, address, square footage, age, description, identifying information, and password. The property is listed once the user submits the form. To include a photograph, however, the user must fill out another form. A photograph, once submitted, is not immediately available to the public. Instead, it is uploaded into a separate "folder," elsewhere in LoopNet's system, where it is reviewed by a LoopNet employee to determine that it is in fact a photograph of commercial property and that there is no obvious indication that the photograph was submitted in violation of LoopNet's terms and conditions. If the photograph meets LoopNet's criteria, the employee accepts the photograph and it is automatically posted along with the property listing. The listing is then made available to any user upon request.
LoopNet does not charge a fee for posting real estate listings or for accessing those listings.2
In the initial complaint, CoStar claims that over 300 of its copyrighted photographs have appeared on LoopNet's site (the number has increased over time). CoStar contends that LoopNet is liable for direct or contributory copyright infringement as a matter of law, asserting that there is no material dispute of fact (1) that it owns the copyrights in the photographs; (2) that LoopNet is copying, distributing, and displaying; and/or (3) contributing to the copying, distributing, and displaying of the photographs without authorization. LoopNet's position on those issues is (1) that CoStar authorized its customers to use the photographs on the internet through the license agreements; (2) that its activities do not constitute direct infringement; and (3) that it is not liable for contributory infringement because it lacked knowledge and did not induce, cause, or materially contribute to the infringing conduct of others.
In addition, LoopNet contends that CoStar misused its copyright and that it is entitled to the "safe harbor" protections provided under the Digital Millennium Copyright Act (DMCA) as an "online service provider." In response to this aspect of their dispute, CoStar contends that LoopNet does not qualify as an "online service provider," does not provide a "web page hosting service," and is not entitled to the protection of the DMCA because (1) the photographs are stored at the direction of LoopNet rather than its users; (2) its review of the photographs prior to permanent storage disqualifies it from protection; (3) LoopNet has not reasonably implemented a termination policy; (4) it obtains a direct financial benefit from the infringing photographs that appear on its web site; and (5) it has not acted expeditiously to remove infringing material. CoStar contends, and LoopNet agrees, that there is no safe harbor for photographs posted prior to December 8, 1999, the date on which LoopNet appointed an agent to receive notices of infringement.
LoopNet also asserts that the copyright act preempts CoStar's non-copyright claims, and that CoStar's statutory damages are limited to, at most, 11 (now 13) infringements.
It is well established that a motion for summary judgment will be granted only if there exists no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In other words, if there clearly exist factual issues "that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party," then summary judgment is inappropriate. Anderson, 477 U.S. at 250, 106 S.Ct. 2505; see also Pulliam Inv. Co. v. Cameo Properties, 810 F.2d 1282, 1286 (4th Cir.1987); Morrison v. Nissan Motor Co., 601 F.2d 139, 141 (4th Cir.1979); Stevens v. Howard D. Johnson Co., 181 F.2d 390, 394 (4th Cir.1950). The moving party bears the burden of showing that there is no genuine issue as to any material fact. FED. R. CIV. P. 56(c); Pulliam Inv. Co., 810 F.2d at 1286 (citing Charbonnages de France v. Smith, 597 F.2d 406, 414 (4th Cir.1979)).
When ruling on a motion for summary judgment, the court must construe the facts alleged in the light most favorable to the party opposing the motion. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962); Gill v. Rollins Protective Servs. Co., 773 F.2d 592, 595 (4th Cir.1985). A party who bears the burden of proof on a particular claim must factually support each element of his or her claim. "[A] complete failure of proof concerning an essential element ... necessarily renders all other facts immaterial." Celotex Corp., 477 U.S. at 323, 106 S.Ct. 2548. Thus, on those issues on which the nonmoving party will have the burden of proof, it is his or her responsibility to confront the motion for summary judgment with an affidavit or other similar evidence. Anderson, 477 U.S. at 256, 106 S.Ct. 2505. In Celotex Corp., the Supreme Court stated:
In cases like the instant one, where the nonmoving party will bear the burden of proof at trial on a dispositive issue, a summary judgment motion may properly be made in reliance solely on the "pleadings, depositions, answers to interrogatories, and admissions on file." Such a motion, whether or not accompanied by affidavits, will be "made and supported as provided in this rule," and Rule 56(e) therefore requires the nonmoving party to go beyond the pleadings and by her own affidavits, or by the "depositions, answers to interrogatories, and admissions on file," designate "specific facts showing that there is a genuine issue for trial."
Celotex Corp., 477 U.S. at 324, 106 S.Ct. 2548. However, "`a mere scintilla of evidence is not enough to create a fact issue.'" Barwick v. Celotex Corp., 736 F.2d 946, 958-59 (4th Cir.1984) (quoting Seago v. North Carolina Theatres, Inc., 42 F.R.D. 627, 632 (E.D.N.C.1966), aff'd, 388 F.2d 987 (4th Cir.1967)). There must be Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505 (citations omitted).
Application of copyright law in cyberspace is elusive and perplexing. The world wide web has progressed far faster than the law and, as a result, courts are struggling to catch up. Legislatures and courts endeavor in this growing area to maintain the free flow of information over the internet while still protecting intellectual property rights. The DMCA is one attempt by Congress to strike the proper balance. Understanding the interplay between basic copyright jurisprudence and the DMCA presents an additional challenge for the courts.
A prima facie case of direct infringement consists of proof of ownership of the allegedly infringed material and violation of at least one of the exclusive rights granted to copyright holders under 17 U.S.C. § 106. A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir.2001).
LoopNet does not contest CoStar's assertion that it owns, in the first instance, the photographs. Rather, in resisting summary judgment on this threshold issue, LoopNet claims that the license agreements, or some of them, grant the licensees the right to publish the photographs on the internet.3
Maryland adheres to the law of objective interpretation of contracts and, thus, where the language is clear and unambiguous, the plain meaning is given effect and no further construction is needed. The question of contract interpretation is one of law for the court. Auction & Estate Representatives, Inc. v. Ashton, 354 Md. 333, 731 A.2d...
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